The United States faces a democratic crisis, as we have been told for several years now. But what exactly does this mean? On the anniversary of the January 6 attempted coup, the answer may seem obvious: the crisis is perhaps most dramatically seen in the transformation of the national Republican Party, which has abandoned a policy-making role for one that simply seeks power. To this end, it has become intent on exploiting vulnerable state-level institutions to suppress votes, gerrymander districts, and allow partisan actors to overturn the popular vote.
But to understand the threat of democratic backsliding in the United States, it is essential to untangle a variety of explanations of our contemporary crisis. These range from the most proximate to the more structural, and all are important. While most American analysts have focused on the former, however, we want to focus on the latter. We argue, in particular, that the economic transition from industrialism to post-industrialism may be less conducive to democracy, or at least provides an explanation for some important threats to democracy that we are witnessing today. Such a lens puts the analysis of the U.S. crisis in comparative perspective, allowing us to see some common threats across rich, historic democracies as well as the specific features that account for the extreme form it takes in our country.
To be sure, the sense of alarm is partly due to the specific behavior of a particular individual, Donald Trump, who entrepreneurially and through dint of personality mobilized a following and exploited openings in the U.S. party system. This explanation is emphasized in literature on the role of leadership and a tradition of analyzing the impact of the Metternichs and Bismarks as well as the Hitlers and Stalins of the world. Trump is a unique, norm-breaking, daring, and mobilizing figure with a particular psychology, which is certainly part of the picture. His ability to mobilize supporters—especially their animus and resentments—is, in one classic image, the narrow end of a causal funnel of explanation that goes from proximate factors to deeper and longer-term factors as it widens.
In fact, as many have noted, Trump is as much the outcome as the cause of transformations in the Republican Party, which go back at least to Newt Gingrich, under whose leadership it became an anti-system party—a “destructive and delegitimizing force,” as Thomas E. Mann and Norman J. Ornstein put it in 2016. One is thus drawn to look at less contingent, less proximate factors.
Widening the funnel, we come to an institutional argument. The Republican Party has exploited the non-majoritarian institutions of American politics, while single-member, winner-take-all legislative districts and the Electoral College ensure that the United States will be a two-party system that results in the greatest representational distortion (the disparity between the percentage of votes and the distribution of legislative seats) among mature democracies. Indeed, as widely noted, the U.S. Senate has become increasingly minoritarian, in that a minority of the population elects a majority of the representatives. The contemporary Supreme Court, meanwhile, has increasingly employed the “shadow docket” in conservative rulings, and analysts have begun to talk about a “weaponized” Supreme Court. In the process, the courts have used judicial supremacy to further weaken basic democratic notions of rule of and by the people based on one-person, one vote.
An important feature of this institutional context is the U.S. system of highly decentralized federalism, in which democratic institutions like election administration are put in the hands of state and county governments. Governments at these levels are especially vulnerable to capture by an antidemocratic faction. In a country becoming more racially diverse and more economically unequal, the transformation of the Republican Party into a national antidemocracy coalition has resulted in democratic backsliding in states that the party controls. As one of us has shown quantitatively, democratic backsliding at the state level—including extreme gerrymandering and voter suppression—is driven not by popular opinion within states, but instead by the national Republican Party.
These specifically U.S. institutions, and the distribution of power and the extreme representational distortion that they produce, are clearly important factors in our democratic crisis, as is the country’s unique legacy of racism, based in a history of genocide and slavery. But these two aspects—the individual and the institutional—do not tell the whole story. Indeed, anti-liberal movements have emerged in other countries with very different democratic institutions. The peculiar features of U.S. institutions do go a long way in explaining the extreme form democratic crisis takes in the United States, but given the widespread nature of the challenges, we wish to widen the funnel further still to think about another, deeper line of structural analysis.
Specifically, it is important to recognize how a country’s economic model can organize and disorganize political groups, empowering and disempowering them and shaping the coalitions they form. Industrialism, we argue, was fertile ground for the construction of a pro-democracy coalition, one supported by labor unions; post-industrialism, or at least the transition to post-industrialism, has fragmented such a coalition. The current problem is how to organize a pro-democracy coalition in the face of the Republican assault.
We point, in particular, to two salient structural features of post-industrial political economy that constitute a challenge to democracy. First, to use a term of art from political science, the structure of mass politics shifted from a single dominant “cleavage”—a conflict between owners and workers organized by labor unions—to a pattern in which politics is organized around many different competing cleavages. Second, there was a shift in the balance of power between capital and the state, which reduced the capacity of the government to respond to social and economic upheaval. Both of these developments present a challenge to democracy, and technology has only accelerated each.
In making this argument, we see ourselves engaged with a budding American political economy community that uses comparative and historical lenses to understand the effects of structural forces. Our story challenges the progressive view of history in which modern democracy is a “developmental” or “evolutionary” achievement toward a more “advanced” outcome. Instead, modern democracy might be an outcome of a particular historical political economy of industrialism that began in the nineteenth century and may be ending—ushering in great uncertainty about the future. The democratic politics of the future must reckon with the consequences of these dramatic developments if it is to survive.
The Organization of Popular Politics
In the advanced economies, the golden age of democracy coincided with the age of industrialism, from the late nineteenth to the late twentieth centuries, and the politics of economic cleavage to which it gave rise. Once labor unions were legalized, they made the decision to participate in democratic politics and became the most important lower-class interest organizations in the country. Our contention is that unions were critical in sustaining mass democracy by virtue of their role in organizing, mobilizing, and sustaining a politics that embraced a broad pro-democratic coalition, which they were able to do on the basis of materialist demands that went beyond the specific interests of their own membership. With the decline of unions and of an industrial workforce on which they were based in the second half of the twentieth century, no alternative organization has been able to articulate a unifying coalition with similar force.
As one of us has argued, democracy cannot be seen simply as the achievement of the working class in the first-wave cases in Western Europe and the United States. Nevertheless, sustaining democracy did require the buy-in not only of conservative parties, as political scientist Daniel Ziblatt has argued, but also of the working classes. During the period of industrialism, unions became the dominant organized voice of the working class, unifying its interests based on a materialist dimension and supporting democracy. In the post-industrial period, by contrast, the structure of the working class has changed and its voice has been fragmented, reducing its power and political effectiveness, and opening the way for internal divisions.
During the era of industrialism, the key role of unions was to prioritize materialist demands in the political arena along a dimension on which issues could be negotiated and compromises reached. Dominant factions of the labor movement championed democracy as a political vehicle, and the struggle along the materialist dimension was quite successful, with rising prosperity for all, culminating in a politics of class compromise of different versions across the industrial democracies of the Keynesian welfare state.
As economist Albert O. Hirschman argued in The Passions and the Interests (1977), material interests came to be seen and championed in seventeenth- and eighteenth-century political thought as “containing the unruly and destructive passions.” It is no coincidence that the illiberal alternate political cleavage of resentment and scapegoating has been especially appealing where deindustrialization has occurred and where unions have been in retreat and no longer organize or lead the political struggle and at a point when materialist advance has been halted for so many. Sociologist Seymour Martin Lipset, in Political Man (1960), also points to the danger of the passions. We do not accept Lipset’s analysis that the working class is particularly prone to authoritarian attitudes and intolerance; in Latin America, for example, it was the middle and upper strata who abandoned democracy in the 1960s and 1970s, while the working class held fast. Still, the passions of resentment—the intolerance and scapegoating that Lipset points to—are an alternate line of appeal to those seeking to mobilize a following along a different line of cleavage.
In the United States, some degree of democracy preceded the rise of unions, which therefore did not play a role in the initial process of democratization as they did in some of European countries. But early American democracy was, to put it lightly, not very democratic; it was not until the mid-twentieth century that the country expanded the franchise to women and Black Americans. In establishing this more substantive form of democracy, unions were central.
This is not to say that unions have always been virtuous. We do not deny that in the United States and elsewhere, unions could be vehicles for racism and xenophobia. The American Federation of Labor (AFL) supported the racially discriminatory Chinese Exclusion Act in the late nineteenth century, for example. And scholars at least as far back as W. E. B. Du Bois have highlighted the threat to democracy posed by white workers preferring to align with economic elites against egalitarian democracy in order to maintain their “psychological wage” of hierarchical privilege over Black and immigrant workers.
At the same time, it is important to recognize how, in the twentieth century, U.S. labor unions played the important role of helping to foster a multiracial worker coalition that served as a bulwark for democracy. Beginning in the 1930s, unions, especially the Congress of Industrial Organizations (CIO), began to construct ideological linkages between racial and economic democracy and organize Black and white workers, alike. By the 1960s the AFL-CIO was a major organizational proponent of the Civil Rights and Voting Rights Acts that ended Jim Crow in the South. Such union efforts in expanding democracy were born of strategic imperatives of unions in the industrial period, which saw the need to organize multiracial coalitions in a racially divided society. As Martin Luther King, Jr. wrote in 1962, “the coalition that can have the greatest impact in the struggle for human dignity here in America is that of the Negro and the forces of labor, because their fortunes are so closely intertwined.” As a consequence, the labor movement has played an important role not only in building broadly shared prosperity, reducing economic inequality overall, but also in doing so between racial groups. It has thus become increasingly clear that labor unions play an important role in safeguarding particularly, multiracial democracy.
In fact, by building political coalitions around materialist politics and preempting a politics of racial and cultural resentment, labor unions in the modern era continue to be critical to the maintenance of democracy in the United States. A recent study coauthored by one of us finds that labor unions reduced racial resentment among white workers between 2010 and 2016—helping to organize white workers around the material wages of shared prosperity rather than the psychological wage of hierarchical status described by Du Bois.
Thus, although unions may not have had the same dominance in the United States as elsewhere, they became the core constituency of the most important political party on the political left. In this sense, the Democratic Party of the industrial era, like its European social democratic counterparts, could be characterized as a labor-based party. Unions structured and channeled interests into demands along materialist, and specifically “productionist,” lines. Even in the Toquevillian United States, where “pluralism” consisted of an unusually diverse set of other kinds of interest organizations, the dominant cleavage for organizations that make political or public policy demands was the economic cleavage: it was, after all, American social scientists who proposed that politics could be modeled along a single economic left-right dimension. Labor unions were the most important organized interests operating on one end of that cleavage.
With the advent of post-industrialism since the 1970s, however, these fundamental structures of interest articulation have been dramatically transformed. A popular interest structure that expressed a dominant economic or materialist cleavage gave way to one that was fragmented around multiple lines of cleavage, expressing both important new issues—but also a backlash to them.
Union density and power declined and was not replaced by other organizations serving a comparable function, at the same time that new social movement organizations came to articulate new interests. The union-dominated structure of popular interest organizations was replaced by one characterized by a greater multiplicity of organizational types, raising new issues through a broadened repertoire of action. Furthermore, the union-dominated structure of popular interest organizations was replaced by one characterized by a greater multiplicity of organizational types, raising new issues through a broadened repertoire of action, no longer based in face-to-face membership groups.
The shift corresponded to several changes. Perhaps most notably, the decline of unions came with the global reorganization of capital: greater integration among national economies in trade, investment, the location of production, and more generally of capital, as well as a change in national economic models and the shift in economic policy that came with it. Policy emphasized international competitiveness, efficiency, and supply-side (especially labor) costs and broke the underpinnings of class compromise based on Keynesian logic, which had centered on sustaining domestic demand. Trade produced not only winners but also losers, as many “good” industrial jobs went overseas. Automation also created losers among workers. As firms pursued a number of strategies to cut labor costs, the workforce became more segmented with the growth of temporary, part-time, and contract workers, many of whom are unprotected by labor law and difficult to unionize. A growing service sector did not replenish the loss of unionized jobs in the declining industrial sector.
In this environment, unions were put on the defensive. Declines in density and power varied across the advanced democracies and was particularly sharp in the United States, where the rate of unionization dropped precipitously from its peak of over 35 percent to just 6.2 percent of the private-sector workforce in 2019. Not only did unions lose clout; they were not replaced by effective organizations representing the new, changed face of the working class.
Alongside these developments, there was a rise of competing “post-material” interests around important issues of rights and risks —such as race, gender, and sexuality rights and nuclear and environmental risks. These and other late twentieth-century social movements achieved momentously important gains, especially for the rights of people of color, women, and sexual minorities. But as labor power declined over this same period, expanded legal rights did not translate into very significant gains in material equality for marginalized identity groups. After declining precipitously since the late nineteenth century, for instance, the Black-white wealth gap in the United States remains above its level in the 1970s. To produce material equality, rights-based movements seem to require a strong labor power component.
In terms of the organization of politics, the result of the post-material turn was to inject greater pluralism into the organizational structure of interest representation, with more issues and interest dimensions in the political struggle, as political scientist Herbert Kitschelt argued with respect to European politics. One result was the fragmentation of interests, with the greater prominence of what in the United States was initially called the rise of “special interests,” a term that came to newly embrace unions in some circles. If that phrase has any merit at all, it reflects disintegration of the large coalitions, even class compromises, that predominated during the era of the Keynesian welfare state.
It is in this context of interest fragmentation and the decline of unions that the materialist interest dimension of mass politics ceased to be predominant, even as economic issues were salient to capital interests and, indeed, to policymakers. As good jobs disappeared and a precarious segment of the workforce, disproportionately people of color, increased, it is notable that the non-unionized were most successful when unions were able to defend their interests, as particularly in Scandinavia.
The declining dominance of the materialist dimension in the organizational structure of interest articulation, combined with a set of economic crises that began in the 1970s, made room for a politics of the “passions” rather than of the “interests.” Our argument is not a simple story of backlash to immigration and civil rights movements; rather, it points to three changes that underwrote mass support for democracy that came with the decline of unions. First, whereas unions organized politics and popular support around a single predominant dimension, contemporary political conflict is fragmented across many different issue dimensions. Second, unions, the most important mass organization on one side of that conflict, saw democracy as helpful in achieving its goal. Third, the weakening of worker demand-making around materialist issues made societies more vulnerable to mobilization of the passions of xenophobia and racism, especially by those whose economic interests are opposed to those of workers.
While these trends occurred across wealthy democracies, the United States was particularly vulnerable. The decline of unionization was particularly steep, in part because this “decline” had a component of outright destruction due to anti-labor policy at the state and federal levels. In addition to its especially precipitous de-unionization, the United States’s ongoing legacy of racial hierarchy is unique among advanced democracies, as is the weakness of its social safety net. Interacting with these features, the United States experienced an early and large influx of non-white immigrants from Latin America and Asia. The decline of unions in this context led to a displacement from materialist politics to a politics that included racial and cultural resentment among white workers.
The Democratic and Republican parties evolved with these changes in the structure of popular interests, partly reflecting them and partly actively advancing them for what they saw as their own competitive, strategic reasons. Increased wealth inequality meant the Republican Party—never a friend of unions, on which it launched an assault starting in the 1980s—would require non-economic political appeals to be electorally competitive. The Republican Party capitalized on and promoted a white, conservative, Christian backlash to groups challenging traditional identity hierarchies especially on race, but also on gender, sexuality, and religion. The GOP, which had been playing the Southern Strategy since the late 1960s, came to be a party that primed the race and anti-immigrant dimension vociferously and overtly, a strategy that doubled down on its shrinking demographic base and provided incentives for its abandonment of democracy.
A feedback loop thus redounded to the advantage of the GOP: with the decline in unions, materialist interests were no longer organized with the same force, and the GOP could more successfully prime other issues and lines of cleavage. It used its electoral gains, in turn, to further weaken unions with state right-to-work laws. In key Rustbelt states, where labor unions were once the major mass political organization, as well as in other places, the remaining environment is populated by organizations that have helped to facilitate rightwing populism, including National Rifle Association chapters, megachurches, and local chapters of Americans for Prosperity. These organizations, rather than organizing working-class interests around a materialist cleavage, mobilize the passions of resentment and perceived threat in the face of social and economic change.
At the same time, the Democratic Party to a substantial extent has moved away from a model of “productionist” labor politics focused on wages and union power, which could bolster the power of workers. At its worst, the Democratic Party actively worked against the power of labor. At its best, the labor agenda transitioned to rights-based demands for inclusion and equity as well as “consumptionist” policy (e.g., health insurance regulation, means-tested welfare state programs, and tax credits and subsidies for consumption). These consumptionist policies address critically important materialist interests of those not protected by labor law, disproportionately minorities and immigrants. But these policies do not affect the organizational structure of popular representation. They are capital-friendly; and, although they benefit many constituencies, they have not bolstered the power and clout of a mass organization that can aggregate a dominant coalition. In terms of class relations, these policies are not zero-sum (especially if not fully supported through taxation), do not change power relations (as does a policy of strengthening unions), and are compatible with marketizing economic orientations (as expressed, for instance, in the Washington Consensus). Yet in terms of cultural relations, they can be seen (often inaccurately) as zero-sum when racialized, which has often left such policies vulnerable to backlash and retrenchment.
Business-State Relations and Plutocracy
This organizational transformation of popular interests is intertwined with another profound shift: the growth of the power of capital relative to the state. This balance of power has shifted dramatically over the past half-century, and with it, electoral regimes have less capacity to respond to democratic preferences. If, indeed, capital was once thought to countervail the power of the state in a way that would underwrite democracy by securing an autonomous field of societal action and thereby preventing tyranny, capital now threatens to capture and overpower the preferences of the democratic majority, while securing its own autonomy from the state. This is not to say that firms or large owners of capital are ideologically unified or do not often find themselves on opposite sides of policy battles, but that their economic and political power has grown.
Many studies have pointed to just how big capital now is, both in sheer size and in its concentration, particularly in the United States. Generally, big capital is associated with monopoly power in markets, and the democratic response of trust-busting and regulation has historically been viewed through the lens of market power. In addition to market power, however, capital is also big and concentrated among fewer firms and individuals across markets and in its share of income relative to labor. Beyond market power, the political power of capital has also increased, amassing two kinds—instrumental and structural—to an unprecedented degree. These changes in capital combined with the decline of unions has shifted the balance of power between capital and the state.
Instrumental power refers to the action of capital in the political arena. Owners of large amounts of capital now have virtually unlimited resources to engage in political activities. Lobbying and spending money on political campaigns have long been a political strategy of capital. However, the extent of these activities has grown enormously in recent years, particularly in the United States. Total lobbying spending, the vast majority of which comes from corporations and industry groups, has swollen to nearly $3.5 billion (with likely much more that goes unreported). Campaign contributions from wealthy individuals and corporations continue to increase, with new opportunities for spending provided by recent Supreme Court rulings in Citizens United v. FEC and McCutcheon v. FEC—with clear consequences for politics and policy.
But it is not only the political spending of big capital that has expanded; so have the variety of political actions it engages in. Corporations or corporate interests, for instance, promote favored policies by subsidizing and mobilizing “astroturf” or manufactured bases of support to make it appear that they have widespread, grassroots support for their favored policies. They also initiate state referenda and recall campaigns and write model legislation for states to adopt accompanied by activities that “persuade” state assembly members to support it. These activities, of course, take money; and big capital has nearly inexhaustible resources for engaging in them. (One of us has analyzed Uber’s use of an incredible array of instrumental tactics.)
Other factors further toward the narrow end of our causal funnel facilitate and magnify this instrumental power. These include the electoral system, which provides for personal candidacies dependent on donor rather than party financing and decentralization in which corporations are especially big players in many small ponds. If corporate funding of candidates has been facilitated by the recent Supreme Court decisions alluded to earlier, that fact represents the feedback loop of corporate funding of think tanks which have promoted conservative judicial appointments. The Court has declared corporations to be persons with free speech rights that are not to be regulated as commercial speech.
In addition to instrumental power, which is actively exercised in the political arena, capital has also amassed profound structural power, which is largely exercised invisibly and passively. Structural power refers to the dependence of the country on capital for investment—and hence for growth and jobs, and also for tax revenue. The point, of course, is the way it turns into political power. It constitutes a strong influence on policy makers to provide favorable conditions for investment. This dependence is obviously not new in capitalist democracies. Conventionally, the structural power of capital is not thought to rely on monopoly power, because firms and financiers can coordinate their economic decisions through market signals. However, increasing corporate concentration makes the state especially dependent on a small number of economic actors, who can thereby wield substantial market power and hence influence policy in a heightened way. Perhaps the most dramatic illustration of this power was the “too big to fail” analysis of the banks that drove policy following the 2008 financial, housing, and unemployment crisis.
In addition to sheer size, globalization also has an impact on corporate political power. If conventionally structural power was associated with capital strike, or the threat of not investing, corporations now also wield the threat of venue shopping—moving operations off-shore or even to another city or state. In this way, they have the power to affect employment opportunities and can wield a threat against efforts to regulate them. Globalization has also allowed them several strategies to shield their earning from taxation and deny states fiscal revenue for pursing democratically popular policies.
The point, then, is the way that big and global capital has shifted its power relationship to the state. Particularly in the United States, it should be theorized as a private power that takes on governing functions. It has had outsized influence on taxation, corporate subsidies, and spending priorities, affecting virtually all substantive areas, including welfare and social spending, climate change, defense policy, and so forth. The state-market border has always been contested. But it is important to delineate what’s at stake and what has recently changed with the rise of “monopoly government.” The result has been to undermine democratic representation in any sense of government responsiveness to citizens with an equal vote. Capital has been able to put a heavy thumb on the scale of influence, and the outcome has been a well-documented divergence between popular preferences and enacted policies, especially when it comes to issues that affect economic inequality.
Technology Exacerbates Both of These Trends
Technology has presented a number of challenges to democracy, as has been widely discussed. Privacy, surveillance, and algorithmic control are just of few of the challenges technology presents to our standard notions of democratic citizenship. Here, however, we focus on the way it has furthered the two broad factors discussed above: technology has reinforced yet a further change in the organizational structure of interest representation, and it itself has constituted a large, cutting-edge, globally deployed and internationally competitive sector that embodies the shift in the power balance between the government and capital.
Technology has exacerbated the shift in the organizational structure of interest representation in three notable ways.
First, it has further eroded the power of unions. Automation has been a major driver of downsizing in the industrial sector. Further, technology itself also constitutes a new, growing, and politically and ideological powerful sector advancing the trend in employment relations toward fractured workplaces, based especially on subcontracting, out-sourcing, and use of independent contracting and gig work. Smart phone technology and data analytics has been key to the expansion of platform work, and the “disruptive” ethos of hi-tech corporate culture has sold gig work in terms of autonomy, flexibility, entrepreneurialism. Quite aside from the fact that compensation on many platforms often hovers around the minimum wage without benefits or labor law protection, these corporations fight unions, and in any case, many of these workers are dispersed and hard to organize. Data analytics has also enabled just-in-time scheduling so that affected workers have no stable work times or even a set of coworkers, making organizing difficult. Technology has also innovated new means to monitor the pace of work, and more generally to track workers through social media and Internet activity and to use algorithms to identify or even “predict” those workers considered likely union sympathizers or organizers.
Second, the rise of social media has introduced new ways of interaction that may constitute less effective forms of popular participation in articulating demands and winning substantive political concessions. On the one hand, social media can facilitate communication and hence organization, collective action, and fundraising. (This view was prominently displayed in the early moments of the Arab Spring uprisings.) On the other hand, it may also substitute the need for strong, stable, politically effective organization in favor of “clicktivism,” crowd dynamics, or a different kind of individualized action. It may facilitate protest but obviate the development of organization that can stay involved in an ongoing fashion to provide representation in the policy process. And obviously, whereas Internet access had initially been considered a democratizing technology, it has clearly emerged as one that can be and has been at least as effectively used to undermine democracy, both by government and by anti-democratic private actors, to affect social attitudes and even sow “chaos” and undermine support for and trust in democracy. The role of foreign state actors in this regard has been dramatic. The same is true of individual actors, both foreign and domestic. As Kevin Munger has argued, whereas in the past one had to rise through civil society institutions such as business, media, or religious organizations in order to have an influential voice, social media has enabled millions of alienated and disaffected people (for myriad reasons) to communicate directly to elites and millions of others in the mass public.
Third, many sorts of tech firms are like utilities (the owners of Internet providers, search engines, social media, and cloud storage, for instance), yet regulation of these industries is incipient or non-existent. The result is an infrastructure and a public space that is private and managed by profit-seeking corporations. As José van Dijck and Thomas Poell have put it, social media represents a form of sociality that is moving from the public to corporate space. Private corporations regulate speech on the Internet, affect channels of communication and information, and create groups of connectivity. U.S. analysts have tended to think in terms of “pluralism” as a bottom-up “spontaneous” creation of interest groups that act in the political sphere. However, comparativists, starting with their analysis of “corporatism,” have long recognized the role of outside actors, often the government, in regulating who is in the group and shaping the form and activities of the organization. Social media use algorithms to construct groups, creating “communities” by linking people through algorithms. Thus, private capital and especially a small set of tech firms regulate the interest regime in this way.
Technology has also contributed to the changing government-capital balance of power. It is a sector often characterized by network effects and winner-take-all markets, so that it is highly concentrated, and the largest firms are of unprecedented size. The Big Five (Google/Alphabet, Meta/Facebook, Amazon, Microsoft, Apple) are now the largest American companies by market capitalization, and their CEOs are the richest people in the world. This concentrated capital expands their capacity to use the structural and instrumental power we described in the previous section.
Further, the tech sector is particularly difficult for the state to regulate because of the speed and complexity of its constant innovations, so that even a willing government would have a hard time constantly playing catch-up. And the impact of technology is not limited to the tech sector per se. For instance, technology lies at the bottom of innovations in the financial sector making it harder to regulate and contributing to the financialization of the economy, which in turn has implications for the distribution of wealth. With limited regulation capacity, the policy-making border between the state and business has shifted.
The Future of American Democracy
This analysis situates the threat to democracy in a larger structural framework and helps us in uncovering the interlocking causes of the crisis of democracy. It also points to the impediments in responding to the structural roots of the threat.
We have stressed political economic factors that underlie the challenge to democracy at the end of the industrial era. Indeed, these factors are present in all advanced democracies, most of which have seen the emergence of illiberal, anti-democratic moments. The unusually strong threat to democracy in the United States compared to most other advanced democracies corresponds to the particularly strong form of the structural changes that we have highlighted. The shift in the organizational structure of popular politics has perhaps gone furthest, reflecting the particularly steep decline in unions and the rise of other interest organizations, thereby affecting the shift in the main cleavages of political struggle. In addition, the shift in the state-capital is particularly notable. The U.S. state has traditionally been open to and penetrated by capital, and U.S. capital is particularly big and global, acquiring more relative power. Beyond that, the more American-specific factors as one moves toward the narrow end of the causal funnel, further explain the more virulent challenge to democracy in the United States.
As we try to meet the challenge, we must realize that all these factors are difficult to change and are unlikely to shift as a result of tweaks to parties’ campaign messaging or fact checks of online misinformation. But, with a recognition of their long-term structural origins, change may be possible. It may rely, in particular, on new tactics both from below and from above to promote pro-democratic mobilization and leadership in order to persuade politicians, the Justice Department, and even the courts to defend democracy—first against the proximate challenges, but also to create the socioeconomic conditions that support it in the longer run.
We have argued that in the period of industrialism, the rapid growth of the industrial sector and the economics of Keynesianism underwrote a social contract and facilitated a supportive positive-sum coalition. In that environment, unions were the predominant organization aggregating and articulating the interests of a mass coalition and playing a key role in supporting democracy. In the post-industrial period, the Republicans actively weakened unions “directly”—through political decisions—but they were also weakened “indirectly” as a by-product of economic policies, which Democratic administrations also sometimes adopted. The key pro-democracy coalition became fragmented.
The Biden administration’s more recent turn to a pro-union orientation is a step in the right direction in building a broad coalition for democracy (though Congress might end up stifling even the most incremental pieces of labor legislation). Regardless, the reality is that unions are unlikely to return to their historic role in a post-industrial era, in which anti-labor policy has been ratcheted up over decades and the structure of the workforce has so changed with the nature of the global economy. The challenge is to build an organizational basis for a mass pro-democracy coalition across many fragmented interests—a coalition that understands that democratic institutions are its best chance to achieve the good life, advancing equality in terms of both economic and racial outcomes. There is as of yet no clear path to this outcome, but the first step is to recognize it.